Archive for July, 2015

Hong Kong: World-renowned microbiologist in parting shots as he quits role on council

By Tony Cheung, Jeffie Lam and Shirley Zhao
South China Morning Post

Professor Yuen Kwok-yung was a member of teams that made breakthroughs in treating the Sars and Mers viruses. Photo: Felix Wong

One of the city’s most respected medical academics is quitting the University of Hong Kong’s governing council with a parting shot against the institution’s decision makers as well as protesting students over the delayed appointment of a liberal scholar to a key managerial post.

Professor Yuen Kwok-yung said he quit because he was “incapable of dealing with the politics in the university council”, as HKU struggles to contain the fallout over the promotion of moderate pro-democracy scholar and former law dean Johannes Chan Man-mun to the post of pro-vice-chancellor.

Yuen’s resignation came days after an HKU council meeting descended into chaos on Tuesday, when a group of students stormed the body’s meeting room and urged councillors to stop delaying Chan’s appointment.

In a letter to the council, Yuen, who’s considered a neutral party in the controversy, had a message for angry students: “Though there are injustices in the system, we will not succeed to change it by verbal and physical violence. As such actions will only bring out the darkest side of human [nature] and open the door for the intrusion by Satan.”

But he also admonished the university’s top brass for the first time, suggesting they were not blameless: “Nevertheless, those in power also have the primary responsibility to face the dilemma and remove these injustices.”

He said his resignation was “related to many things … Even the storming was not caused by the students themselves, it was caused by the selection of a pro-vice-chancellor”.

“There were a lot of people outside [the university], a lot of political forces from outside trying to affect this situation, so in the end students barged into the meeting,” Yuen said.

He said he had been considering resigning in recent months, and only filed his resignation letter last night. He will stay on the council until a replacement is elected.

Yuen said that for decades, Hong Kong had been able to find a way out amid clashes of ideas, political beliefs and forces. But in recent years, it seemed the city had lost that ability.

“I don’t have any political training, but the council is a miniature version of society,” Yuen said. “In recent years, Hong Kong has been going through political turbulence, and politics was brought into the council … I think I should let a capable person take my place.

“Having reached this stage, I don’t have the ability to change what has happened, no ability to turn the conflict … into a positive thing. This is what a leader should do, but I don’t have that ability. I might as well go back and deal with infectious diseases and mucor spores instead.”

Mucor is a type of mould with six species, found in soil, plants, rotting fruit and manure.

In his resignation letter to the coumcil, Yuen said although there was “injustice in the system, we will not succeed to change it by verbal and physical violence”.

“Such actions will only bring out the darkest side of humans and open the door for intrusion by Satan. Nevertheless, those in power also have the primary responsibility to face the dilemma and remove these injustices,” he wrote.

HKU vice-chancellor Peter Mathieson looks on as students storm the university’s council meeting on Tuesday night. Photo: Dickson Lee

HKU vice-chancellor Professor Peter Mathieson said after a forum today that Yuen had insisted in leaving despite his efforts to persuade him to stay.

“I profoundly regret that he’s resigned,” Mathieson said. “He is a loss to the university council. I have enormous respect for Professor Yuen and I understand his feelings and his reasons.”

Mathieson said he did not think Yuen was powerless as he is a “highly influential and a very highly respected academic”. He said Yuen might have had negative feelings due to recent experiences.

Mathieson would not describe the recent turmoil as a “management crisis” but major challenges the university is facing. He said he was confident that if all parties in the university worked together constructively the problems could be solved.

He reiterated that political pressure had always been a factor at universities, especially publicly-funded ones. He said the management team’s job was to take in views from all sides and make decisions best for the university.

During the storming of the council meeting on Tuesday, councillor Professor Lo Chung-mau injured his knee and Yuen accompanied him as he was taken to hospital.

Lo and Yuen are two of the four councillors elected to represent the university’s full-time lecturers.

In the aftermath of the storming, councillor Professor Arthur Li Kwok-cheung and pro-Beijing newspapers described the episode as “Hong Kong Cultural Revolution”, referring to the 1966-76 turbulence when mainland Chinese students, known as Red Guards, persecuted and tortured intellectuals. Some historians believe that millions died in those 10 years.

“The Cultural Revolution was initiated by Mao Zedong, and people were tied up with ropes, thrown into the river [and drowned] … what happened on Tuesday was not initiated by Hong Kong’s leader and the nature was not as serious,” he said.

Yuen also suggested that the students’ storming was not conducive to solving the problem.

Yuen’s three-year term started in December 2012. He is one of the world’s premier virus fighters and was named an Asian hero by Time magazine for his work in fighting the 2003 severe acute respiratory syndrome outbreak. His team later helped track how the virus that caused Sars passed from bats to humans via civet cats.

He is also a member of the HKU research team whose recent breakthrough study has found two existing drugs offer the best hope of beating the Middle East respiratory syndrome (Mers) coronavirus that has claimed hundreds of lives globally since its emergence three years ago.

Yuen and Arokiaraj’s resignations will leave the university council with 20 members, including Mathieson and 13 external members – six of which were appointed by Chief Executive Leung Chun-ying.

Meanwhile, 15 ex-presidents of the HKU student union issued a joint statement on Thursday night, offering their support to students as they urged the HKU council to safeguard the university’s autonomy.

I don’t have any political training, but the [HKU] council is a miniature version of society

“We think this is a righteous action of the students to safeguard the academic freedom and university’s autonomy. It might not be perfect but is still worthy of public support,” the statement read.

The former presidents also said the current composition of the HKU council had violated the principle of the university’s autonomy and offered room for government interference as only eight of the 23 members were staff and students of the university.

The signatories included Democrat Mak Hoi-wah, Cheung Yui-fai, executive committee member of the Professional Teachers’ Union, Laurence Tang Yat-long, member of the Basic Law Promotion Steering Committee and Yvonne Leung Lai-kwok, a former core member of the Federation of Students which co-led Occupy protests last year.

An investor looks at an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China, July 30, 2015. REUTERS/CHINA DAILY

China’s securities watchdog is investigating the impact of automated trading on share markets, as authorities step up a crackdown on what they regard as heavy speculative selling that could destabilize the world’s second-largest economy.

China’s main share markets, both among the world’s five biggest exchanges, have lost around 30 percent of their value since mid-June, but authorities have been flailing in efforts over the past three weeks to prevent a further sell-off.

Fearing the turmoil could spill over into the wider economy, which had already been cooling, the ruling Communist Party has enlisted the central bank, the state margin-lender, commercial banks, brokers, fund managers, insurers and pension funds to buy up shares, or help fund their purchase, to keep the Shanghai and Shenzhen markets afloat.

The China Securities Regulatory Commission (CSRC), the markets regulator, has stepped up scrutiny of share traders and their clients, launching investigations of “share dumping” and declaring war on “malicious short-sellers”.

It is also asking financial institutions in Singapore and Hong Kong for stock trading records, sources with direct knowledge told Reuters, widening its pursuit of investors shorting Chinese stocks as Beijing struggles to stabilize queasy exchanges.

The CSRC announced automated trading as the latest focus of its investigations on Friday, as share markets lost more ground.

China’s benchmark CSI300 index .CSI300, which comprises the largest listed firms in Shanghai and Shenzhen, dipped in morning trade, though it is still up around 7 percent over what has been a roller-coaster 2015.

Wang Feng, chief executive of Alpha Squared Capital, a Chinese hedge fund, said the regulator was targeting automated trading programs that involved the frequent cancelling of bids, though he added that his firm did not employ this tactic.

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“The CSRC is only targeting those who use program trading to frequently submit and then cancel bids, thus disturbing the market and manipulating prices,” he said. “Such a practice is closely watched by regulators in the U.S. as well.”

The CSRC identified 24 stock trading accounts where it said it had detected abnormal bids or bid cancellations. Later, the Shanghai and Shenzhen exchanges said these accounts would be suspended until October 30.

SPECULATION OF MORE STIMULUS

Amid the market turmoil, some foreign investors see an opportunity to buy, believing confidence will eventually return and private Chinese investors will come back to the market.

“At some point, the magnitude of the Chinese market has to reflect its industrial might,” said Yu-Min Wang, chief investment officer at Nikko Asset Management which oversees around $170 billion.

However, a Reuters poll showed that Chinese fund managers had cut the proportion of their portfolios to be invested in stocks over the next three months to a 6-1/2-year low.

Beijing’s unprecedented but so far unconvincing efforts to hold up the market have led foreign investors to air doubts about the leadership’s ability to ensure financial stability at a time of slowing economic growth, high corporate debt and the threat of deflation.

On Thursday, investors took fright at a newspaper report that banks were trying to get to grips with their financial exposure to the market slump, through wealth management products and loans collateralized with shares.

Reuters could not verify the report.

Beijing’s intervention in the share market has also raised questions over its commitment to free-market reforms, seen as essential for China to pull off its planned transition from an export-led economy to one based on consumption and services.

There are also some worries about the impact of falling share prices on the real economy, though household ownership of shares is very low and – apart from a further drop in luxury car prices – there has been no concrete evidence yet of a major impact on consumption.

However, the market rout has rekindled expectations that the People’s Bank of China will ease monetary policy further in the next few weeks. It has already cut interest rates four times since November and repeatedly loosened restrictions on bank lending.

Japanese brokerage Nomura said in a note this week that it expected another 50 basis point cut to the reserve requirement ratio for banks, which would free up more money for lending, and another interest rate cut of 25 basis points before year-end.

China’s Politburo, a decision-making body of the Communist Party, this week promised to step up targeted adjustments of economic policy to foster stable growth.

The classified emails stored on former Secretary of State Hillary Clinton’s private server contained information from five U.S. intelligence agencies and included material related to the fatal 2012 Benghazi attacks, McClatchy has learned.

Of the five classified emails, the one known to be connected to Benghazi was among 296 emails made public in May by the State Department. Intelligence community officials have determined it was improperly released.

Revelations about the emails have put Clinton in the crosshairs of a broadening inquiry into whether she or her aides mishandled classified information when she used a private server set up at her New York home to conduct official State Department business.

While campaigning for the 2016 Democratic presidential nomination, Clinton has repeatedly denied she ever sent or received classified information. Two inspectors general have indicated that five emails they have reviewed were not marked classified at the time they were stored on her private server but that the contents were in fact “secret.”

The email issue, however, has distracted from Clinton’s campaign for days and already has hurt her in public opinion polls. Besieged with questions, she has found herself caught in a murky dispute between State Department and intelligence officials over whether emails on her server were classified.

“Even if Secretary Clinton or her aides didn’t run afoul of any criminal provisions, the fact that classified information was identified within the emails is exactly why use of private emails . . . is not supposed to be allowed,” said Bradley Moss, a Washington attorney who specializes in national security matters. “Both she and her team made a serious management mistake that no one should ever repeat.”

McClatchy also has determined some details of the five emails that the intelligence community’s inspector general has described as classified and improperly handled.

Intelligence officials who reviewed the five classified emails determined that they included information from five separate intelligence agencies, said a congressional official with knowledge of the matter.

Clinton’s campaign did not respond to requests for comment. Clinton has maintained she used a personal email account as a “matter of convenience” and has denied she emailed any classified material.

“The facts are pretty clear,” Clinton said at a campaign stop Saturday in Iowa. “I did not send nor receive anything that was classified at the time.”

Clinton said she had “no idea” which emails the inspector general had singled out.

The State Department so far has not given the intelligence community inspector general a copy of the entire batch of emails, according to Andrea Williams, a spokeswoman for the inspector general’s office.

State Department spokesman Alec Gerlach pointed out that the department has allowed access to the emails.

“At the invitation of the State Department, a team of IC FOIA reviewers are reviewing emails and identifying those that might contain IC equities,” he said, meaning information that pertains to the intelligence community. “About a dozen members of the intelligence community are reviewing emails to identify their equities so that emails can be referred to their agencies.”

Gerlach said the intelligence community inspector general can also obtain emails from the organizations for which it has oversight responsibility.

The IC inspector general has authority to audit and investigate matters related to 17 intelligence community agencies, including a State Department intelligence unit.

On June 25, McCullough notified members of Congress that he understood that Clinton’s attorney, David Kendall, possessed the more than 30,000 Clinton emails on a computer thumb drive.

In a July 24 letter to FBI Director James Comey, Republican Sen. Charles Grassley of Iowa expressed concern about “a compromise of national security information” because of Kendall’s possession of the thumb drive. He called on Comey to explain what steps the FBI had taken to secure the information.

“This raises very serious questions and concerns if a private citizen is somehow retaining classified information,” wrote Grassley, the chairman of the Judiciary Committee.

Kendall did not respond to phone and email messages. The FBI and the Justice Department declined to say whether security officials had recovered the device or had arranged for its secure storage.

John Fitzpatrick, the official responsible for overseeing the government’s security classification system, told McClatchy that during the review of four years of Clinton’s State Department emails it became clear that intelligence agencies were concerned State Department officials were not appropriately protecting classified information in screening documents for public release.

State Department officials routinely gather and report diplomatic information that “in an intelligence context could be read very differently,” said Fitzpatrick, the director of theInformation Security Oversight Office at the National Archives.

Government employees with access to classified information are trained to identify classified information, Fitzpatrick said.

“The requirement to mark is so that you know it when you see it,” he said. “Failure to observe any of the requirements for marking or safeguarding would be in a category known as a security violation.”

Failing to properly mark information as classified would not necessarily result in criminal charges, he said.

“But there can be consequences for holders of security clearances,” Fitzpatrick said. “If they fail to safeguard the information, once or as part of a pattern, they can be administratively reprimanded” or retrained.

Secretary of State John Kerry and State Department Inspector General Steve Linick will meet this week to talk about the issue, White House spokesman Eric Schultz said Wednesday.

“Secretary Kerry wants to get to the bottom of this, hear what the concerns are and then figure out if they need to take any action,” Schultz said. “So, I think that’s the right step and we support him doing so.”

The White House has not said that Clinton did not follow rules, but it has repeatedly said that “very specific guidance has been given to agencies all across the government, which is specifically that employees in the Obama administration should use their official email accounts when they’re conducting official government business.”

The House Select Committee on Benghazi subpoenaed the emails while asking Clinton to voluntarily turn over her personal email server to a “neutral, detached and independent” third party for “immediate inspection and review,” perhaps the State Department’s inspector general.

Clinton’s attorney told the committee that Clinton permanently deleted all the emails from the server – apparently after she was asked by the State Department to turn them over. Clinton has refused to hand over the server.

The State Department has begun to release her emails in response to a public records lawsuit, though four of the emails containing classified information were among those that have not yet been released. The next batch is due to be released Friday. Clinton has agreed to testify about her email arrangements on Oct. 22 before the committee investigating Benghazi.

A barrage of cyberattacks on government agencies, blue-chip companies and critical infrastructure has prompted Pentagon officials to take a hard look at adapting the military concept that helped keep the world safe from nuclear bombings during the Cold War to the digital battlefield of the 21st century.

For four decades, the U.S. and the Soviet Union built up massive stockpiles of nuclear weapons but never used them. Part of the reason was the belief on both sides that any attack would be met with an equally devastating counterstrike. Military planners called the idea mutually assured destruction.

Today, plans for “cyber deterrence” aim to develop something analogous — an ability to retaliate that would be so threatening that no adversary would try to breach federal computer networks.

National security officials have recently stepped up their public warnings about the need to build such a deterrent.

The Pentagon’s Cyber Command and the National Security Administration, with headquarters at Ft. Meade in Maryland, are looking for ways to deter foreign cyberattacks against U.S. government and business targets. (Patrick Semansky / Associated Press)

“If we do nothing, then one of the potential unintended consequences of this could be, does this send a signal to other nation states, other groups, other actors that this kind of behavior is OK and that you can do this without generating any kind of response?” Adm. Mike Rogers said in a recent speech. Rogers, who is both the military’s top commander for cyber operations as head of U.S. Cyber Command and director of the National Security Agency, made the remarks at the Aspen Security Forum in Aspen, Colo., last week.

Without an aggressive U.S. response as a deterrent, a rise in destructive cyberattacks against government and business appears likely, a recent intelligence assessment predicted.

“Until such time as we come up with a form of deterrence that works, we’re going to have more and more of this,” said Director of National Intelligence James R. Clapper, also at the Aspen forum.

“I think the next wave, if you will, will be data deletions and data manipulation, which will also be very, very damaging,” Clapper said.

But despite a significant increase in the number of attacks, the Obama administration has not settled on a consistent policy for responding.

Director of National Intelligence James Clapper.PHOTO: BRYAN THOMAS/GETTY IMAGES

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As the internal debates continue, the problem has escalated.

In recent months, thousands of emails have been sent to government addresses by hackers trying to entice federal officials into downloading carefully disguised spyware. The “spear-phishing” emails are tailored to convince the recipient to open an attachment.

The increase in state-sponsored computer attacks stems in part from a perception that “there is little price to pay for engaging in some pretty aggressive behaviors” online, Rogers said.

In many cases, hackers designed the spear-phishing emails using personal information stolen in earlier breaches of government databases, including what officials say was China’s theft of millions of security-clearance files from the Office of Personnel Management and the infiltration by Russian hackers of the State Department’s unclassified email system. Officials say the personnel records are a gold mine for designing future cyberattacks and approaching American government officials who might be turned into spies.

Those incidents were part of an escalating fusillade of cyberattacks, some of which caught U.S. intelligence off-guard.

In February 2014, hackers who officials say were linked to Iran erased hard drives and froze servers running slot machines and loyalty rewards programs at Las Vegas Sands Corp. casinos in Las Vegas. Sands was likely targeted because the casino company’s owner, conservative billionaire Sheldon Adelson, had said the year before that a “mushroom cloud” could rise over Tehran if it continued its nuclear development program.

November saw the attack on Sony Pictures, in which hackers wiped out data and released sensitive files. The FBI said the North Korean government wanted to prevent the studio from releasing “The Interview,” a film that mocked leader Kim Jong Un. Sony has spent at least $15 million to repair the damage.

Then, the attacks on the State Department email system and the government’s personnel files proved how vulnerable some government systems were.

“The number of threats have gotten worse and are only escalating,” warned Mac Thornberry (R-Texas), chairman of the House Armed Services Committee. “We have to figure out how to retaliate against an attack.”

Building a cyber deterrent, however, is more complicated in some ways than developing the capacity to retaliate against a nuclear strike.

One set of problems involves the unintended consequences of deploying a cyber weapon. Intelligence analysts have warned that if the U.S. decides to engage in tit-for-tat cyberattacks, the effect could ripple across the World Wide Web. Even though the Internet was invented by American computer scientists, existing defenses on U.S. computer systems may not be strong enough to withstand a series of counterattacks.

Another difficulty is identifying an attacker. If a nuclear-tipped missile were launched toward the U.S., it wouldn’t be difficult to identify where it came from. Determining the origin of a cyberattack is sometimes much harder.

“This is a new realm of war,” said Peter W. Singer, a fellow at the nonprofit New America Foundation in Washington and coauthor of the book “Cybersecurity and Cyberwar.”

“We need to get better at it. We need to develop a better deterrence model. But it’s never going to protect you against 100% of all attacks that’s sent your way.”

Military officials insist, however, that given enough time, they can develop tools that will work. During a congressional hearing in March, Rogers discussed the need to build up a stock of cyber weapons to deter foreign countries from trying to hack vital networks.

“Just as we fashioned a formidable nuclear capability that served us through the Cold War and beyond, I am confident in our ability to keep pace with adversaries,” he said.

The Obama administration has determined that it must retaliate againstChina for the theft of the personal information of more than 20 million Americans from the databases of the Office of Personnel Management, but it is still struggling to decide what it can do without prompting an escalating cyberconflict.

The decision came after the administration concluded that the hacking attack was so vast in scope and ambition that the usual practices for dealing with traditional espionage cases did not apply.

But in a series of classified meetings, officials have struggled to choose among options that range from largely symbolic responses — for example, diplomatic protests or the ouster of known Chinese agents in the United States — to more significant actions that some officials fear could lead to an escalation of the hacking conflict between the two countries.

A Chinese lawyer has filed a formal information request to police in the northern city of Tianjin in a bid to find out the whereabouts of his lawyer, detained rights attorney Wang Yu, who has been held at an unknown location since the start of a nationwide crackdown on the legal profession.

Yu Wensheng filed the freedom of information request online on Saturday, calling on Tianjin police to reveal her location, and what crimes she is suspected of committing.

“Nobody knows what has happened to Wang Yu, and we only know that she was criminally detained through the media,” Yu told RFA. “Even her relatives and her defense attorneys don’t know.”

“Wang Yu was also my defense attorney, and because I am currently out on bail, from a legal perspective, I have an interest in her case, and I also believe I have a duty to understand her whereabouts and the nature of the charges against her,” he said.

“That’s why I filed the freedom of information request with the police.”

Since Wang’s detention amid a night-time raid on the Beijing-based Fengrui law firm on July 10, at least 255 lawyers, paralegals and legal support staff have been detained or questioned by Chinese police, the Hong Kong-based Chinese Human Rights Lawyers Concern Group said in a statement on its website.

Lawyers in undisclosed locations

Of those, 230 have since been released, but 12 lawyers and three non-lawyers are still being held in undisclosed locations, including Wang Yu, her husband Bao Longjun, and Fengrui colleagues Wang Quanzhang, Huang Liqun and Zhou Shifeng, it said.

China’s tightly controlled state media has accused the Fengrui lawyers of “troublemaking” and seeking to incite mass incidents by publicizing cases where they defend some of the most vulnerable groups in society.

According to Yu, the lack of information about Wang’s whereabouts contravenes China’s Criminal Procedure Law. “Such a large-scale detention of lawyers is also in breach of legal procedural regulations,” he said.

“I think they are trying to create a climate of fear for lawyers, so that some of them won’t dare to speak out, or may not take on human rights cases,” Yu said. “But I don’t think they will succeed in their aim.”

“Maybe some rights lawyers will be silenced, but even more will rise up in opposition, and still more will want to enter the profession of human rights lawyers,” he said.

Rights lawyer Chen Jiangang said that information on the whereabouts of detainees should be given to relatives and lawyers as a matter of course.

“Nobody should have to apply for it,” Chen said. “The police should formally notify the families within a time period specified by law, but China’s police don’t abide by the law at all nowadays.”

“Every step they take is against the law now.”

Fearless ‘warrior’ Wang

An officer who answered the phone at the Tianjin police department declined to comment on the case.

“For freedom of information requests, you need to contact the complaints department, or you can call them and try,” the officer said. “I don’t really know about this.”

The overseas-based Chinese Human Rights Defenders (CHRD) group said Wang Yu is described by those who know her as a courageous and fearless “warrior.”

“She has raced to the front lines of rights defense work in China to provide legal aid to those in need, regardless of how difficult or politically sensitive a case is,” it said in a statement on its website.

Wang has represented activists, scholars, members of the banned Falun Gong spiritual group, farmers who lost their land, forced evictees and petitioners seeking to protect their rights, those of women and children, and the right to freedom of religion, housing and of expression, CHRD said.

“Wang Yu has frequently been harassed, threatened, searched, and physically assaulted by police since she began to take on rights abuse cases in 2011,” it said

Meanwhile, authorities in the southern Chinese province of Guangdong detained rights activist Jia Pin after he tried to attend the subversion trial of the Guangzhou Three rights activists last week.

“Jia Pin turned out in support at the trial of Tang Jingling, and he was taken away by police at the gates to the court along with a lot of other people … from across the country,” a friend of Jia’s who asked to remain anonymous told RFA. “They are all safe and we have heard from all of them now, except for Jia Pin.”

“He was taken onto a train by six state security police officers, for escort back to his hometown, and we were able to talk with him by phone while he was on the train, but after he got off the train, they moved him to a state security police building in Nanyang, Henan province,” the friend said.

“There has been no word from him since, and we are all very worried; Jia Pin has done a lot of rights activism and the state security police from Nanyang have never come looking for him before, so we think things could go very badly for him this time,” the friend said.

Reported by Yang Fan for RFA’s Mandarin Service, and by Ka Pa and Dai Weisen for the Cantonese Service. Translated and written in English by Luisetta Mudie.

The scope of the repression offers a glimpse of a grave situation. The public is questioning the government’s ability to manage the slowing economy, particularly the recent stock market dips, and President Xi Jinping’s anticorruption campaign has caused deep divisions within the Communist Party. In this context, the increasing popularity of human rights lawyers, especially among the disgruntled and oppressed, and their rising influence on social media, has scared our leaders to such an extent that they felt it necessary to carry out the current wave of nationwide arrests.

A series of high profile cases this year has confirmed the leaders’ fear that the party might lose control and their legitimacy might crumble.

On May 2, the police in the northeastern town of Qing’an fatally shot a petitioner, Xu Chunhe, during a scuffle in front of his elderly mother and three young children at a train station. When local officials cleared the police of wrongdoing, a team of defense lawyers sued on behalf of the family. Through social media, they obtained video from witnesses and accused state media of doctoring surveillance tapes to cover up police brutality. The case stirred a groundswell of public anger toward the government.

Exxon has moved to conserve cash in a sign that it doesn’t expect a quick rebound in crude prices. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS

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By Chelsey Dulaney
The Wall Street Journal

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Exxon Mobil Corp., the biggest and richest U.S. oil company, reported its lowest earnings in six years on Friday as bigger profits from refining couldn’t offset plunging earnings in its exploration and production business.

Shares of Exxon Mobil tumbled as much as 5% on Friday to their lowest level since mid-2012. Recently, shares were down 4.7% to $79.11.

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Exxon also said it would again scale back its share buybacks during the current quarter to a level of $500 million. Exxon bought back $1 billion in shares in the second quarter, which was down from its previous level of about $3 billion in buybacks each quarter. Stock repurchases are popular with investors because they shrink the number of shares available and tend to make them more valuable.

In a news release, Chief Executive Rex Tillerson said results in the latest quarter “reflect the disparate impacts of the current commodity price environment.”

Profit in the exploration and production, or upstream, business plunged 74% to $2.03 billion in the latest quarter, as its U.S. division swung to a loss.

The average price Exxon realized in the U.S. for crude fell to $54.06 a barrel from $98.55 a barrel a year earlier. For natural gas, average U.S. price fell to $2.31 per thousand cubic feet from $4.46 a year ago.

Exxon’s production improved 3.6% to 4 million oil-equivalent barrels a day.

But the Irving, Texas, company was again been helped by fatter profits in its downstream and chemicals divisions, which are being boosted by low prices for oil and gas. In the latest quarter, Exxon made more from those divisions than from pumping oil and gas for the first time since at least 2000.

Refining and marketing earnings, or downstream, more than doubled to $1.51 billion from $711 million a year earlier. Exxon cited stronger margins for the increases. The chemical segment earnings improved 48% to $1.25 billion as lower feedstock costs boosted margins.

In all, Exxon reported a profit of $4.19 billion, or $1 a share, down from $8.78 billion, or $2.05 a share, a year earlier. Revenue fell 33% to $74.11 billion.

Analysts polled by Thomson Reuters expected a per-share profit of $1.11 and revenue of $72.48 billion.

Capital spending fell to $8.26 billion from $9.8 billion a year earlier.

Exxon has moved to conserve cash in a sign that it doesn’t expect a quick rebound in crude prices. The company has announced it would slash its capital spending by this year and reduce its stock buybacks in the near term.

Chevron Corp., the second-biggest U.S. oil company in market value behind Exxon, on Friday said its profit tumbled to its lowest level since 2002 in the second quarter as the oil company took more than $2 billion in impairments and charges to suspend projects amid lower crude-oil prices.

Protesters mass at the Education Ministry in Taipei on Friday. Photo: AFP

Talks between Taiwanese Education Minister Wu Se-hwa and students protesting over changes to the high school history curriculum broke down on Friday after Wu refused to meet their demands to resign and retract the ministry’s “mainland Chinacentric” additions.

Wu met the protesters at around noon outside the ministry, with hundreds of demonstrators chanting “step down”.

The night before, the protesters stormed the ministry and the Legislative Yuan, demanding Wu take responsibility for the death of 20-year-old student leader Lin Kuan-hua. Lin committed suicide on Thursday morning in what some other demonstrators said was “a silent protest” against the curriculum changes.

The changes, set to take effect today, include a reference in history textbooks to Taiwan being “recovered by China” instead of “given to China” after the end of Japanese occupation in 1945.

The 50-year period of Japanese rule is also referred to as an era when “Japan occupied” the island, replacing the previous reference to “Japan governing” the island.

The ministry said it was not compulsory for high schools to use the new textbooks, and the changes would not be covered in university entrance exams. But the protesters claim the changes will downplay Taiwan’s national identity and lead to closer ties between Taipei and Beijing, which claims Taiwan as its province.

They have vowed to protest outside the ministry until Wu agrees to apologise, retract the revision, and resign.

Addressing the protesters, Wu said: “We would like to invite representatives of students and history instructors to sit down and discuss what they find inappropriate about the revision.”

He said Legislative Speaker Wang Jin-pyng would soon convene a meeting of the lawmakers to end the impasse.

But demonstrators interrupted Wu, saying “Give me a yes or no answer. Will you step down and retract the revision?”

Taipei mayor Ko Wen-je also met the students later in the afternoon, calling on the ministry to reach a consensus with the protesters through negotiation as soon as possible.

He also urged both protesters and the police to stay calm and rational.

ST. PETERSBURG, Russia — The Russian Orthodox Church on Friday defended its controversial bid to fully take over St. Petersburg’s landmark St. Isaac’s Cathedral, saying it’s in line with the law and wouldn’t hamper tourist access.

The Orthodox Church, which has wielded increasing clout in Russia, has taken jurisdiction over many historic churches and monasteries in Moscow and other cities since the Soviet collapse. It has faced difficulties, however, reclaiming its erstwhile assets in St. Petersburg.

The 101-meter high St. Isaac’s is one of the world’s biggest cathedrals, designed by French architect Auguste de Montferrand and built in 1818-1858. Many of its treasures were pilfered after the 1917 Bolshevik revolution, but the cathedral itself escaped demolition unlike many other historic churches.

It features on the list of UNESCO’s cultural assets and is the third most-visited cultural site in St. Petersburg. It has continued to serve as a museum, but the Church has periodically used it for services.

The museum’s director, Nikolai Burov, warns that the takeover could impede tourist access and slow down the pace of restoration works. Some city legislators also opposed the church’s bid, and local activists have pushed for a referendum on the issue.

Natalya Rodomanova, a spokeswoman for the Russian Orthodox Church‘s St. Petersburg eparchy, said Friday that its bid complies with the Russian law. She said tourist access to the building will not be impeded.

“Tourists will have similar access to it as they do now, except that the entrance will be free of charge,” she said. “St. Peter’s Cathedral in Rome belongs to the Catholic Church, and many other known cathedrals around the world belong to religious organizations and it doesn’t hurt the tourist flow.”

Several city legislators strongly opposed the church’s takeover of St. Isaac’s and backed the referendum.

One of them, Maxim Reznik, head of the city legislature’s education, culture and science commission, said discussion of the issue should not be held behind “the closed doors” but involve broad public involvement.

“St. Isaac’s Cathedral is one of the major symbols of St. Petersburg,” he said. “It should not belong to only one organization, even if it is a very powerful one.”

A part number on aircraft wreckage recovered on the Indian Ocean island of Reunion confirms it came from a Boeing 777, a Malaysian official said Friday, raising the possibility it came from Malaysian Airlines flight MH370.

“From the part number, it is confirmed that it is from a Boeing 777 aircraft. This information is from MAS (Malaysia Airlines),” Deputy Transport Minister Abdul Aziz Kaprawi told AFP.

The wing component bears the part number “657 BB”, according to photos of the debris.

Abdul Aziz’s remarks are the latest by officials involved in the hunt for MH370 to indicate the increasingly likelihood that the piece of wreckage came from the missing Malaysia Airlines flight.

There is now hope that the part can soon be conclusively identified to solve the mystery of MH370, which vanished 16 months ago with 239 people aboard while on route from en route from Kuala Lumpur to Beijing.

‘Close to solving mystery’

The two-metre (six-foot) long piece of wreckage, known as a flaperon, has been sent to France for analysis.

Abdul Aziz said the most definitive confirmation of the part’s origin would have to come from Boeing, saying the aircraft manufacturer performed modifications to the flaperon that would make it easy to identify.

“I believe that we are moving close to solving the mystery of MH370. This could be the convincing evidence that MH370 went down in the Indian Ocean,” he added.

Australia, which has led search efforts for the missing plane in a stretch of Indian Ocean around 3,700 km (2,300 miles) east of Reunion, said Friday it was possible the wreckage could have been carried to the French island by ocean currents.

“The fact that this wreckage was sighted on the northern part of the Reunion Island is consistent with the current movements,” said Transport and Infrastructure Minister Warren Truss.

China has found itself involved in another dustup in the South China Sea, as their current amphibious assault rehearsals and live-fire maritime exercises in the region have drawn Vietnam’s ire.

Vietnamese authorities, believing that China’s presence in those waters violates their sovereignty, issued a statement demanding that the exercise be halted. On Tuesday, after Vietnam had already lodged their complaint, China’s navy — the People’s Liberation Army Navy (PLAN) — took things a step further, beginning live-fire drills that involved at least 100 naval vessels and dozens of aircraft, and during which thousands of shells and dozens of missiles and torpedoes were fired.

Part of the problem, as far as Vietnam is concerned, is that they hold claim to the nearby Paracel Islands, and the surrounding waters. But their complaint doesn’t hinge solely on contested waters, per se — though most of China’s claimed islands and waters in the South China Sea are contested by one country or another. Rather, Vietnam is peeved because, on July 20, only two days before their exercise was to begin, China issued a statement declaring that no other vessels would be allowed in the area for the duration of their maneuvers.

Sending out warnings about impending military drills and shooing away civilian vessels is standard practice (and very good manners) in most situations. But when that no-go zone is extended into international waters or what you consider to be your territory, it’s considered very rude indeed.

“The basic problem is China attempting to establish some level of ownership, and therefore control, over what the rest of the world sees as an international waterway,” Denny Roy, a senior fellow at the East-West Center, told VICE News. “China has the same right as everyone else to hold naval exercises in international waters, but not to unilaterally declare parts of international waters closed to other countries’ shipping while China is exercising. That is a precedent other countries cannot allow unless they are willing to accept Chinese ownership of the South China Sea.”

Not only is China blocking what most believe to be international waterways, but at least a portion of the area makes up what Vietnam believes to be its Exclusive Economic Zone (EEZ), a sea zone over which Vietnam has special economic rights regarding exploration and use of marine resources. And this isn’t the first time China has impinged on Vietnam’s EEZ.

In May 2014, China parked a state-owned oil rig in Vietnam’s claimed EEZ, resulting in riots across Vietnam as citizens responded to the perceived incursion by protesting Chinese-owned companies. At least 21 people died in the protests, and the US State Department condemned China’s actions, calling them “provocative” in a statement.

China, however, insisted that they were operating in strictly Chinese waters, and that Vietnam violated China’s sovereignty by sending a flotilla to disrupt China’s actions. Though China pulled their rig out of the region only two months later, they gave no explanation for the removal, and in June of this year, they moved the rig closer to Vietnam’s coast, though not quite so close as it was last year.

“[The Chinese] just reject flatly that the Vietnamese have any claims on these waters, and their position is, ‘These people don’t have any right to be upset with us over what we do in our water,'” Kelley Currie, a senior fellow with the Project 2049 Institute, told VICE News. “So I think that when it comes to trying to ‘diffuse tensions,’ most of the effort tends to be on the Vietnamese side. The Chinese aren’t going to bend or yield on these territorial claims in the South China Sea.”

While tensions have grown between China and their neighbors in South East Asia, almost everyone involved has attempted to cozy up to the US. Chinese president Xi Jinping is scheduled to visit the US in September, both Japan and the Philippines have treaty alliances with the US, and over the past several years, the relationship between the US and Vietnam has gone from fairly chilly to at least room temperature. The two countries started warming up to each other in the ’90s, when diplomatic relations were initially restored, and they’vecontinued to grow closer as relations with China have grown more tense.

Adm. Scott H. Swift, left, commander of the United States Pacific Fleet, during a seven-hour surveillance flight over the South China Sea in July.Credit Tyler R. Fraser/Reuters

Part of the appeal of a US-Vietnam friendship, at least for the Vietnamese, is the balance the relationship provides when set against the worsening relationship the state has with China. Also, experts believe that US intervention is necessary to lessen tensions in the South China Sea, as most of the smaller South East Asian nations don’t have enough power to so much as give China pause.

“The United States has long said it remains neutral in the dispute and has essentially taken a pretty passive stance as to what’s going on in the South China Sea,” Michael Mazza, a research fellow with American Enterprise Institute, told VICE News. “I think the United States needs to, in conjunction with its allies and partners in the region, actually come down on at least what it believes are high seas versus territorial waters. And perhaps make some judgment on what are plausible claims and what are not. That can give the United States a baseline from which to act in the region to push back against particularly egregious Chinese behavior, or egregious behavior from others, in order to deter more aggressive activities.”

Unlike most of its neighbors, though, Vietnam can stand up to China on its own, though it hasn’t had a great deal of luck in affecting change in the larger country’s behavior. Vietnam has a very capable military relative to the rest of South East Asia, and they’ve been working to grow their capabilities, stocking up on submarines, anti-submarine aircraft, and anti-ship cruise missiles. Though their military does not yet reach a level where they can hold off China should a fight ensue, their growing capabilities do allow them to at least show China that, should they end up in a scuffle, China won’t escape unscathed.

“The reason that you have things like Kilo subs from the Russians, or BrahMos missiles, or sub-launched ground-attack missiles is all of these things send a message to Beijing that, ‘We can’t win a fight, but we can give you a bloody nose,'” Gregory Poling, a fellow with the Sumitro Chair for Southeast Asia Studies and Pacific Partners Initiative from the Center for Strategic and International Studies, told VICE News. “That changes the cost-benefit analysis for China. Clearly, it makes others like the Philippines seem the low-hanging fruit, so it puts a ceiling on the degree of provocations you’ll see, I think, toward Vietnam. China doesn’t want to provoke actual retaliation or aggression from Vietnam.”

While it’s impossible to predict what either country’s next move will be, experts expect tensions to remain high for the foreseeable future, with China unlikely to moderate its behavior short of a US intervention.

Without any immediate setback or economic cost to China, Mazza said, they’ll continue to do as they please. And while it’s unlikely that they’ll do anything to provoke a real military response, there are other concerns.

“I don’t think we’re in danger of a calculated move on China’s part, which they know will bring about some sort of conflict. What I worry about is a misperception on China’s part,” Mazza told VICE News. “I worry about the cumulative effects of these sort of ‘salami slices’ reaching a point where the other countries say enough is enough, and China is surprised by the strength of the reaction. And I’m also worried about the potential for an accident at sea or in the air, which is heightened in a situation like this, and I would be worried about something like that escalating.”

China Blames U.S. Military Actions for Tensions in the South China Sea

HONG KONG — A top Chinese official said Thursday that American military drills and surveillance flights in the South China Sea were threatening regional stability, a harsh assessment that seemed likely to heighten tensions between the two countries before several crucial meetings.

The official, Col. Yang Yujun, a spokesman for the Ministry of National Defense, said it was the United States, not China, that was to blame for rising tensions in the resource-rich South China Sea, where China and several other countries are engaged in territorial disputes.

“The Chinese side expresses its deep concern about the United States pushing the militarization,” Colonel Yang said at a news conference in Beijing. “The behavior by the United States can only lead one to suspect whether the American side is driven by a desire to see the world in turmoil.”

China has been feverishly piling sand onto reefs in the South China Sea for the past year, creating seven new islets in the region. It is straining geopolitical tensions that were already taut.

It is likely to be high on the agenda when President Xi Jinping visits the United States to meet with President Obama in September, and when Secretary of State John Kerry goes to Malaysia next week for a meeting of Asian nations.